02022cas a2200265 a 4500 AALejournalIMF021532 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513570747 1018-5941 BD-DhAAL BD-DhAAL Duval, Romain. Labor and Product Market Reforms and External Imbalances : Evidence from Advanced Economies / Romain Duval, Davide Furceri, Joao Tovar Jalles. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We explore the impact of major labor and product market reforms on current account dynamics using a new 'narrative' database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions. Mode of access: Internet Furceri, Davide. Jalles, Joao Tovar. IMF Working Papers; Working Paper ; No. 2021/054 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/054/001.2021.issue-054-en.xml IMF e-Library